The Consumer Price Index for All Urban Consumers (CPI-U) for the Denver-Boulder-Greeley, Colo., metropolitan area increased 3.0 percent from the first half of 2015 to the first half of 2016, the U.S. Bureau of Labor Statistics reported today. Assistant Commissioner for Regional Operations Stanley W. Suchman noted that higher costs for shelter (7.6 percent) were largely responsible for the overall increase. Costs for energy fell 10.4 percent and food prices were virtually unchanged. The all items less food and energy index, which includes shelter, advanced 4.5 percent.

 

Food

Food prices were nearly unchanged (0.1 percent) from the first half of 2015 to the first half of 2016, compared to a 1.5-percent gain in the same period one year ago. Prices for food at home declined 0.6 percent while costs for food away from home rose 1.0 percent over the year. Comparatively, these indexes rose 0.9 and 2.9 percent, respectively, from the first half of 2014 to the first half of 2015.

Energy

The energy index, which includes motor fuel and household fuels, decreased 10.4 percent from the first half of 2015 to the first half of 2016, following a decline of 21.7 percent in the same period one year ago. Falling prices for motor fuel (-13.9 percent), all of which occurred in the most recent half of the period, were largely responsible for the decline in the energy component. Lower prices for utility (piped) gas service (-11.1 percent) and electricity (-3.4 percent) also contributed to the decrease. During the same period one year ago, motor fuel prices declined 32.4 percent and costs for utility (piped) gas service and electricity were down 10.8 and 1.8 percent, respectively.

All items less food and energy

The index for all items less food and energy rose 4.5 percent from the first half of 2015 to the first half of 2016. Shelter costs had the greatest upward impact on the index and continued their pattern of accelerating rates of increase with a gain of 7.6 percent after rising 5.5 percent in the same period one year ago. This was the largest annual increase recorded since the 1980s. Other expenditure categories that registered higher prices over the year included recreation (3.4 percent), apparel (4.4 percent), and medical care (1.7 percent).

The Denver CPI-U stood at 245.191 for the first half of 2016. This means that a market basket of goods and services that cost $100.00 in the 1982-84 base period cost $245.19 in the first half of 2016. Because metropolitan area CPI data are not adjusted for seasonal price variation, consumers and businesses should be cautious in drawing conclusions about long-term retail price trends from short-term changes in the area indexes.

CPI-W

The Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) for the Denver-Boulder-Greeley, Colo., metropolitan area for the first half of 2016 was 234.248. The CPI-W increased 2.7 percent from the first half of 2015 to the first half of 2016.

The Consumer Price Index for the Second Half of 2016 is scheduled to be released in January 2017.

Technical Note

The Consumer Price Index (CPI) is a measure of the average change in prices over time in a fixed market basket of goods and services. The Bureau of Labor Statistics publishes CPIs for two population groups: (1) a CPI for All Urban Consumers (CPI-U) which covers approximately 89 percent of the total population and (2) a CPI for Urban Wage Earners and Clerical Workers (CPI-W) which covers 28 percent of the total population. The CPI-U includes, in addition to wage earners and clerical workers, groups such as professional, managerial, and technical workers, the self-employed, short-term workers, the unemployed, and retirees and others not in the labor force.

The CPI is based on prices of food, clothing, shelter, and fuels, transportation fares, charges for doctors' and dentists' services, drugs, and the other goods and services that people buy for day-to-day living. Each month, prices are collected in 87 urban areas across the country from about 6,000 housing units and approximately 24,000 retail establishments--department stores, supermarkets, hospitals, filling stations, and other types of stores and service establishments. All taxes directly associated with the purchase and use of items are included in the index.

The index measures price changes from a designated reference date (1982-84) that equals 100.0. An increase of 16.5 percent, for example, is shown as 116.5. This change can also be expressed in dollars as follows: the price of a base period "market basket" of goods and services in the CPI has risen from $10 in 1982-84 to $11.65. For further details see the CPI home page on the Internet at www.bls.gov/cpi and the BLS Handbook of Methods, Chapter 17, The Consumer Price Index, available on the Internet at www.bls.gov/opub/hom/cpi/.

In calculating the index, price changes for the various items in each location are averaged together with weights that represent their importance in the spending of the appropriate population group. Local data are then combined to obtain a U.S. city average. Because the sample size of a local area is smaller, the local area index is subject to substantially more sampling and other measurement error than the national index. In addition, local indexes are not adjusted for seasonal influences. As a result, local area indexes show greater volatility than the national index, although their long-term trends are quite similar. NOTE: Area indexes do not measure differences in the level of prices between areas; they only measure the average change in prices for each area since the base period.

The Denver-Boulder-Greeley, Colo., Metropolitan Statistical Area includes Adams, Arapahoe, Boulder, Broomfield, Denver, Douglas, Jefferson, and Weld Counties in Colorado.

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